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Friday, August 12, 2022

Could historic preservation help affordable housing in Miami? This group hopes so

On the corner of SW 5th Street and 14th Avenue sits a four-unit building that would look just as at home in Miami Beach as it does a few blocks from Little Havana’s central tourist district.

“People don’t think that there’s any Art Deco structures in Little Havana, but there’s a lot of them,” said Vinson Richter, the CEO of Dade Heritage Trust, a non-profit that focuses on historic preservation. “Most of the great generational architecture found in Miami is found in Little Havana. There’s mid-century modern and Art Deco and buildings from the 20s and all of the boom and bust periods of Miami. It’s all here.”

What’s here in Little Havana is a proof-of-concept for an innovative way to help address Miami’s escalating affordable housing crisis: Blending historic preservation work with affordable housing efforts.

In the early days of the COVID-19 pandemic, before it became clear that South Florida was about to see the highest increase in housing costs in the nation, members of the Dade Heritage Trust came to the Miami-Dade Board of County Commissioners with the idea of mixing the two ideas.

The Dade Heritage Trust was founded in 1972 and focuses on historic preservation efforts in many different ways. The pitch Christine Rupp gave to lawmakers was that if the county gave the group a grant, it could revamp endangered buildings while keeping the properties affordable.

On paper, the project seemed to make sense. For years county leaders and activists had been sounding the alarm that aging, affordable properties were being bought up, torn down and rebuilt into luxury developments. If efforts were not made to rehab aging properties to keep them both livable and affordable, everyday people would find themselves without anywhere to live. The pandemic-era housing boom has only accelerated those fears.

“Why are we tearing down buildings that offer affordability to build new?” asked Christine Rupp, the executive director of Dade Heritage Trust. “These older buildings — they were constructed in a time where there were no parking requirements. They generally allow for more density. So it only makes sense to restore and rehab these buildings because we’re preserving the neighborhood aesthetic or preserving the historic architecture. And in this case, we’re preserving the affordability.”

Modern parking requirements force new developments to provide a specified amount of parking spaces per living unit. Many older developments were built before those requirements went into effect, meaning more people are housed in a smaller geographic area. For that reason, Little Havana in Miami is one of the most walkable, densely populated – and affordable – areas of all Miami-Dade County. The age of the buildings here helps out for density and affordability. But the age also brings maintenance problems, with some of the properties riddled with issues. Developers, smelling blood, move in and purchase the old properties, knock them down and redevelop them, only this time with fewer units due to parking and mandatory setback requirements.

With that arrangement, there would be the same (if not more) demand for housing, but less supply. According to the laws of basic supply and demand economics, the housing costs would only go up.

In May of 2020, Miami-Dade County gave Dade Heritage Trust a $1 million grant to get its first project started. The total cost of the first building the group bought – this building in Little Havana – was $650,000 in 2020.

“We’ll spend every bit of that balance on the restoration,” said Rupp.

Christine Rupp is the executive director of the Dade Heritage Trust. The group has been approved for an additional $1 million grant is is looking to acquire a new property under the program.

The overall idea of the project is to repair endangered, architecturally significant properties and rent them out at affordable rates. All of the rent money collected will go into the newly created Historic Preservation Revolving Fund for Affordable Housing, which can then be used to purchase more properties.

Over time, as more rent money is collected, the program can build on itself.

For the first project, renovations are nearing completion. The Art Deco building, originally built in 1938, stands out on the block, and three of the four units have been completely renovated, with the final unit underway.

“They were living with roof leaks and mold and vermin and rats, you name it all here. But all that stuff’s been eliminated,” said Richter, who is doubling as project manager for the renovations.

“The building was kind of plain Jane. It was painted over. None of the architectural features were readily visible. And so what we did is we brought back all of the details of the building through an exterior renovation. There was a bunch of satellite dishes and wiring and piping and all kinds of things that didn’t belong, that detracted from the beauty of the building, and we removed, cleaned it up. And right now, we’re just doing interior cleanup and the building is awesome.”

1401 SW 5 street interior

The interior of the fourth unit is currently being renovated. This unit will be set at a market rate, while the three other apartments have rent set at $900 a month.

When renovation work was set to begin, the group was unclear about how it would proceed without displacing any residents.

“Thankfully, one of our tenants actually moved out. So we’ve been able to rehab one unit at a time and then shuffle people around into their brand new unit, so they don’t have to leave their address,” said Rupp.

The three units that have tenants are paying $900 a month for refurbished one-bedroom apartments, well below the current market rate of more than $3,000, according to Apartments.com.

The last unit, which is currently being rehabilitated, will be offered at market rate as a way to subsidize the overall cost of insurance, maintenance, and other issues that might arise for the property.

As required by the Miami-Dade legislation that enacted the Historic Preservation Revolving Fund for Affordable Housing, a 30-year restrictive covenant has been placed on the property, ensuring it will remain at a specifically-designated affordable rate for years to come.

“It doesn’t limit us from selling the building, but it means that the new owner would have to uphold those affordability standards should someone purchase the building,” said Rupp.

If the non-profit ends up selling the property at some point (it has no immediate plans to do so), the money from the sale would go back into the revolving fund, which it could then use to purchase and rehab another property.

The non-profit does not profit from the program, and none of the funds collected goes into Dade Heritage Trust’s budget. The money doesn’t technically help the organization keep its lights on, but it “furthers our mission” of historic preservation, with an added social component, said Rupp.

“Doing these kinds of things might be the future of Dade Heritage Trust,” added Richter.

Miami-Dade County recently approved a second $1 million grant to Dade Heritage Trust for the program. The group is currently looking for a second property to acquire, with the unfortunate caveat that with the housing market so high, the money will probably not go as far as it did two years ago.

“We have to be really mindful of the project that we choose and make sure that the numbers work for us and for the county,” said Rupp.

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